FEATURES Table 3-1


Stage Definition / Features


Maturity of Retail Real-Estate Markets (as of November 2012) Transparency Major Formats Main Entry Method Retail Stock


PRE-INSTITUTIONAL • Limited investment • Lack of organized shopping formats • Local owner-occupiers dominate


EMERGING


• Middle class growing • Consumers aware of retail formats • Shopping districts emerge


MATURING


• Surge of well-organized malls • Domestic/foreign chains enter market • Significant growth in retail sales


MATURE


• Retail property as institutional asset class • Consumer affluence; liquidity still evolving • Domestic/foreign retailer sophistication


ADVANCED INSTITUTIONAL


• High liquidity and transparency • High discretionary spending • High barriers to market entry (expensive)


Opaque • Street shops


• Domestic retailers dominate • Difficult path to entry


Low Transparency


Semi- Transparent


• Department stores • Supermarkets


• Shopping malls • Hypermarkets • Online sales


• Modern retail in prime areas • Local partner needed


• Develop/acquire malls • Local partner preferred


Transparent


• Mature retail formats • Suburban shopping centers


Highly Transparent


• Big- box/specialty shops • Entertainment formats • Competitive online sales


Source: Prudential Real Estate Investors


environment that can influence fashions, entertainment and ultimately spending patterns.


 Political. Urban areas also wield political power, providing a voice for concentrated public investments in infrastructure such as airports, transit systems, hospitals, and universities.


Table 3-2


Southeast Asia Versus Other Selected Regions* (2013-2017 Projections) 2012


Estimated GDP** Per


Capita (US$)


Southeast Asia Indonesia Malaysia


Singapore Thailand Vietnam


Other Regions United States


Western Europe 3,510


10,346 49,560 5,310 1,630


49,870 39,880


GDP Growth,


2013-2017 (% Per Annum)


6.5% 5.2% 4.2% 4.9% 6.5%


2.3% 1.1%


* As of March 2013 ** GDP=Gross Domestic Product Source: Economist Intelligence Unit


The urbanized share of Southeast Asia’s population2


jumped from 25% in 1980 to 50% today, as depicted in Chart 3-1. If current population trends continue, the urbanization rate will reach 75% by 2050. At this rate,


Population Growth (% Per Annum, 2013-2017)


1.0% 1.3% 2.4% 0.7% 1.0%


0.8% 0.3%


• Acquire/re-position malls • Develop without partner • Indirect (debt, listed stocks)


• Acquire malls • Multiple entry options


Non- institutional


Retailers Countries


• Domestic retailers Pakistan, Venezuela, Iraq, Kazakhstan, Myanmar, Laos


Limited institutional grade stock


Development expands institutional stock


Institutional grade stock


• Domestic retailers • Foreign retailers (big cities)


• Foreign retailers penetrate • Strong retailer competition • National brands emerge


• Chain retailers expand into secondary locations and cities


Institutional grade stock


• High foreign retailer penetration (big cities)


Vietnam, Philippines, Indonesia, Russia, India


Malaysia, Thailand, Poland, South Korea, China, Taiwan


Singapore, Hong Kong, France, Italy, Japan, Germany


United States, Australia, United Kingdom


Chart 3-1 Urbanization Rates for Selected Countries*


* As of November 2012 Note: e=estimated; f=forecast Source: Economist Intelligence Unit


the size of the urbanized population in Southeast Asia would grow by a net 300 million over the next four decades.


Labor Market With solid job growth projected for Southeast Asia in


the coming years, retailers have reason to be considering expansion. Singapore and Malaysia are expected to lead the region in employment gains over the next several


2 Michael Pacione, “Urban Places: A Global View,” Retail Property Insights, Vol. 19 (No. 3), 2012, pp. 1-13, retrieved April 19, 2013. 13


INTERNATIONAL COUNCIL OF SHOPPING CENTERS 2


RETAIL PROPERTY INSIGHTS VOL. 20, NO. 1, 2013


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